Utility opportunity: customer engagement. Turning from opposition to strength — what you need to know

By Gavin Bade in Utility Dive, June 28, 2017,  POST, SHARE,  TWEET

More and more, utilities are realizing they’re in the customer service business. It wasn’t always that way. Power companies used to refer to the individuals on the other side of the meter as “ratepayers” or even just “load.” Customer want not just information, but control over their energy use, including demand management programs, innovative rate plans and clean energy options.

As the digital economy increases choices in all industries, power customers are demanding the same of their electric utilities. While many are still content with a default power service package, increasing numbers want additional options to make their electricity consumption cleaner and more affordable.

The shift represents both an opportunity and problem for utilities. If they do nothing, customers could look to alternative service providers, like rooftop solar and community aggregators, leading to load defection and decreased utility revenues. And as more corporations embrace sustainability targets, they may opt for direct contracts with alternative energy suppliers, bypassing utility service.

But if power companies act, they can use these new customer desires to strengthen their relationships. Partnerships with third party vendors can provide customers with efficiency upgrades, smart devices and distributed generation, allowing utilities to use the behind-the-meter resources for grid services. And in some states, regulators are building in performance-based incentives that allow extra revenue earning if utilities meet customer engagement goals.

How can utilities navigate this new world of customer service? That’s what we endeavor to answer in this Spotlight, highlighting best practices and emerging ideas for customer engagement in the power sector.

  1. 5 trends to watch in utility customer engagement From smart thermostats to energy marketplaces, these are the trends shaping consumer engagement in the power sector. Read More >>
  2. Utilities are finding new ways to communicate with their consumers Remember when no one wanted to talk with their utility? That’s not the case anymore. Read More >>
  3. Utility customer engagement goes digital Utilities find the best engagement experience involves meeting customers where they are — online and on mobile devices. Read More >>
  4. For utility customer satisfaction, J.D. Power says communication, control are key Customers are happiest when their utility engages before there’s a problem, a new industry survey shows. Read More >>
  5. What do utility customers want? There’s an app for thatThe energy app landscape is expanding fast as more vendors and utilities tackle energy efficiency and customer relationships via the mobile device. Read More >>
  6. Corporate demand pushes new generation of utility green tariffs Utilities are rolling out more sophisticated, lucrative green tariffs to satisfy corporate sustainability goals. Can they prevent key accounts from defecting to independent suppliers? Read More >>
  7. Inside Austin Energy’s customer-focused business strategy By offering its customers an aggressive lineup of energy products to match their needs, interests and values, the utility is lowering customer bills at the same time. Read More >>

Partnerships. Utilities can’t do it all. Their primary functions are maintaining power lines and delivering energy—not designing web sites, smart phone apps and cellular networks. But as those ancillary tasks play a larger role in how they connect with customers, utilities are reaching out to specialized tech companies to build the interfaces and products they need. 

“Partnering is the name of the game these days,” said Nest’s head of energy partnerships, Jeff Hamel. Nest is probably the most well-known smart thermostat on the market, a sleek and modern product now owned by Alphabet (formerly Google). “Our core focus is technology and customer experience,” Hamel said, explaining why utilities turn to the company.

Seth Frader-Thompson, co-founder and President of EnergyHub, says it may be one of the most important trends in the space now. “Partnerships are huge—they’re kind of everything, going forward,” he said. “As recently as a couple of years ago, a lot of utilities were worried they were going to be pushed out. And they’re now realizing it’s a huge opportunity.

Those partnerships can include any range of services, from integrating a smart thermostat to building an app, or developing the backbone infrastructure to tie it together. Cellular and tech companies are now partnering to offer dedicated spectrum for utilities to build their networks, as utility’s quickly move away from older, one-way paging devices on their system.

Knowing the customer

It sounds simple, but utilities with better customer information are more successful in marketing programs. Some are calling it a “360 view” of the customer, while others just refer to it as segmentation. Regardless, it comes down to arming customer contacts with the most useful and complete information.

Austin Energy, for instance, has about 460,000 customers and created a program giving service representatives access to preferences and history. “When someone calls in, we have a program we kind of developed in-house that gives us a pretty good sense of what that customer really prefers, and it creates a much more personal relationship with our customers,” Deborah Kimberly, Austin Energy’s Vice President of Customer Energy Solutions, told Utility Dive.  

“Whether it’s a billing issue, outage management, a move or disconnection, that’s where the utility can engage those customers if they know a little about them,” said Smart Grid Consumer Collaborative President and CEO Patty Durand. “That’s where they need to invest a little more.”

Electric utilities are finally moving beyond a narrow focus on delivering power, said Patty Durand, president and CEO of the Smart Grid Consumer Collaborative (SGCC). They are leveraging their knowledge of the industry with new tools and communications channels, and “they are repositioning themselves to be the energy experts,” she said.

That means efficiency, self-generation, and a focus on renewables. And the trend is likely to continue, according to Durand, as a new generation of power customer becomes even more engaged. SGCC recently completed research on  consumers born between 1982 and 1999, and will produce additional analysis this summer focused on engagement surrounding Millennials.

“The shift we’re anticipating is more engagement around electricity and sustainability,” she said. “The electricity industry is well-positioned to take advantage of that higher sense of value.”

Connected devices, smart thermostats

From an energy and home perspective, the most significant is the smart thermostat. “Smart thermostats are probably the best gateway to engage consumers,” said Durand. “If you’re going to pick one thing, the research points towards thermostats. It’s something everyone is already aware of. Very high numbers of people want one.Austin, Texas, is now requiring all new home construction to include smart thermostats, putting more customers in closer connection with the city’s utility and demand management programs. But connected devices go far beyond smart thermostats. By 2021, internet-connected devices will account for more than half of the world’s 27 billion gadgets, according to Cisco. In the energy space, those will include water heaters, electric vehicle chargers, pool pumps and more—anything that consumes energy which can possibly be used to shift demand to off-peak and less-expensive times.

Close to 10% of homes in urban areas have some kind of a connected device, according to Frader-Thompson. Most commonly that’s a thermostat, and the number is growing about 40% year-over-year.  A full two-thirds of enrollments for utility Bring Your Own Thermostat (BYOT) programs are done via a smartphone. The BYOT model is a popular and growing method for utilities to attract customers to demand management programs, allowing choice and control within the home as utilities link their systems with more manufacturers’ devices. the ability to connect with more and smaller customers, and to see them as granular resources, is broadly changing the way the entire system works, he explained.

“The key changes were modern software platforms and communication technology that allows utilities to be more surgical: they can target only the areas where they need load relief, they can run shorter and more frequent events, they can shift load throughout the day, and they can have load follow renewable supply both up and down,” Frader-Thompson said. “And obviously they can still reserve capacity for operational emergencies

“What you used to see, demand response was an emergency resource, and utilities would put it in and hope they didn’t have to use it,” Frader said. “Part of that was because of the technology they were putting in people’s houses. The technology wasn’t as capable, but has gotten better. … Now, instead of only running demand response territory-wide, utilities are moving into ‘operational demand response’ and might be doing some kind of demand response every day.”

More communications, more ways

In general, as long as utilities are targeting their message and tailoring it to a customer, more communication may be better. 

Salt River Project, for example, sends out 1.5 million customer emails each month to its 1 million customers. And while much of the engagement focus is on residential customers, the same ideas apply to other sectors. J.D. Power’s survey of business customers, released earlier ths year, also came back with indications of sustained improvement to satisfaction.

“Utilities are really beginning to understand the importance of engagement with their business customers, which is reflected in increased communication,” John Hazen, director in the utility & infrastructure practice at J.D. Power, said in a statement.

The firm concluded that utilities are communicating with “more of their business customers, more often and in more ways, and their efforts are resulting in record-high levels of satisfaction.”

Big data

The ability to collect and utilize large amounts of data is helping utilities not just market services and programs more effectively, but also to operate their system more effectively and reliably.

The industry will need to invest more in reaching customers, said Durand. “It’s a bit too fast, too soon, to imagine the electricity can go from not marketing to their customers to understanding them on an individual basis. There needs to be step-wise growth.”

Companies like Axiom and MSI can “score” a utility’s database field by field, using publicly available data that other industry’s are already using to better understand customers. “It doesn’t have to be expensive,” said Durand, “though it can be, depending on how much information you gather.”

On a larger scale, tech-focused energy companies can help other organizations manage their data. Walgreens tapped EnerNOC in 2015 for its energy intelligence software and ability to manage the chain’s utility accounts. And utilities are using the processing power behind their demand management programs to help keep the grid running smoothly.

“What you used to see, demand response was an emergency resource, and utilities would put it in and hope they didn’t have to use it …part of that was because of the technology they were putting in people’s houses. The technology wasn’t as capable, but has gotten better,” said Frader-Thompson. “Now, instead of only running demand response territory-wide, utilities are moving into ‘operational demand response’ and might be doing some kind of DR every day.”

Energy marketplaces

As utilities seek to enroll customers in demand management programs, help retrofit inefficient homes, replace older lighting, or provide any other service, many are bring all of those offerings together in one place.

Commonwealth Edison introduced an online marketplace of energy-saving devices just before the holidays last year, using Simple Energy’s platform to power the ComEd Marketplace. ComEd’s President and CEO Anne Pramaggiore, in announcing the move, said it would be a “key step to building a premier, trusted customer experience.”

Pramaggiore added that ComEd is expecting the marketplace to evolve over time, eventually becoming a place where “our customers can transact with us and other parties for a wide range of energy-related products and services.”

Georgia Power’s marketplace is also powered by Simple Energy, and offers LED lighting, thermostats, water-saving devices, a security camera and power strips. And California’s Pacific Gas and Electric offers everything form efficient water heaters to air purifiers and sound bars.

“I know of almost no utility that isn’t investigating or hasn’t launched an ecommerce site,” said Durand.


Key to improving customer service is “a culture that puts customers and employees first,” Hazen said, along with an attitude of “continuous improvement.”

And the actual service delivered by utilities is improving. Customer-reported electric bills are at their lowest point in a decade, averaging $129 per month compared with $132 last year. And reliability is improving: the frequency of brief outages has been in decline since 2010, and more than 40% of customers reported “perfect power” last year (up from 37%) the year before.

“Utilities are getting better,” Hazen said. “If you compare them to other industries, they still trail in overall satisfaction. But to me, the nice thing in recent years is the interest in customer satisfaction. And in the top performers, it’s starting to become ingrained, culturally.”

“You have to change the mindset internally, that it isn’t just customer service’s job to take care of customers. It’s everyone’s,” he said.

Utilities share customer service strategies 

One reason utilities may be able to rapidly improve the customer experience is their willingness to share strategy and technique with other power providers. Because there is little competition between them, there is no leg-up lost. Renee Castillo, senior director of customer experience services at Salt River Project, said she is on calls with other utilities about twice a week, around the country and in Canada. The utility was top-ranked among large western providers for its customer service this year by J.D. Power, and has held that spot for 15 consecutive years.

“I’ve been in this space for 27 years and we do share information,” Castillo said. “We share information and I think that is what is wonderful about this industry. … The power industry used to be at the bottom. We were the best of the worst. But as time has gone on, we’re really gaining ground.”

In addition to SRP, PPL Electric Utilities topped J.D. Power’s rankings for large providers in the East; MidAmerican Energy in the Midwest; and Florida Power & Light in the South. This year’s survey is the first time FPL won the award. The utility said in a statement that its low rates are a big reason for its success. “It’s no accident that FPL’s typical 1,000-kWh residential customer bill is about 30 percent lower than the national average,” said Eric Silagy, president and CEO of FPL. “We work hard to operate efficiently and make long-term cost-saving investments for our customers.”

FPL and other utilities have also benefitted from commodity prices. Natural gas remained at historically low prices — below $3/mmBtu — throughout 2015 as it displaced coal as the most utilized electric generation resource. FPL itself sourced more than 70% of its electricity from the resource, and it is expected to make up over a third of the cumulative U.S. power mix this year.

Customer satisfaction tied to communication

As the utility industry fully embraces new ways of connecting with customers, it is able to share increasing amounts of information. Proactively keeping customers in the loop is tied to their satisfaction, even at times when service is down.

SRP sends out 1.5 million customer emails each month to its 1 million customers. “Like many industries, we’re trying to give customers information before they can even call us,” said Castillo. “If they’re experiencing an outage and we know about it, we serve up that information before they call us. We know they’re the most satisfied with us, if we get them the details first.”

The utility industry has moved past the era where customers called to report an outage, said Hazen. The expectation today is for the utility to make that call. “Even from an outage perspective, we have reams of data that shows, ‘if I don’t get any info, my satisfaction is low. If I get outage info by calling the utility, it’s even lower,'” he said.

And proactive communications, through email, text or an app, can help utilities save money in their call centers. “Utilities should chase customers with information,” Hazen said. “The more you push information, the less folks have to call you.”

The sector appears to be internalizing that message already. In a Utility Dive survey of more than 500 utility professionals at the beginning of the year, the majority indicated their companies would expand their use of proactive, engaging digital communications and put less emphasis on old methods, such as paper statements.

Digital communications, especially social media and mobile apps, were most popular among utility respondents. Credit: The State of the Electric Utility 2016 

Informed, in control

But you have to go a step beyond just putting data in front of customers, Castillo said. Utilities must also educate, so customers know how to use the information. “We’re having great conversations with out customers about how they use power. It’s not something you can grab or put your arms around, but everyone needs it,” Castillo said. “So we’ve been working to help our customers understand it.”

By working to educate customers about their bills, it means the utility can provide more information and deeper insights. “We’ve taken a lot of the big surprise out of that bill,” she said.

Customer want not just information, but control over their energy use, including demand management programs, innovative rate plans and clean energy options.

“We have many self service channels,” Castillo said, but the utility also makes sure its call center employees are “very well versed.” 

“We’ve seen a big jump in self-service interactions. We’ve put  lot of functionality [online],” she said.

SRP was an early adopter of time-of-use plans, putting them into use in the 1980s. The utility is also the largest provider of pre-paid electricity, giving customers a real-time display and an easy way to start service.

“For college kids starting out, it’s a perfect program,” Castillo said. The utility also allows customers to choose their due date.

“Energy is a pretty substantial part of monthly household expenditures. If your customers can have some control over how that money is spent, we know they are more satisfied.”

Programs like those from SRP may soon be available from a larger group of utilities. Utility Dive’s State of the Electric Utility survey revealed most respondents expected their companies to enhance consumer education of new offerings and energy conservation, both through in-person meetings and digital communications. 

Emphasizing proactive engagement with customers can help utilities sell more products and services while assisting with energy conservation. Credit: State of the Electric Utility 2016 

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Autogrid’s Japan project could be world’s largest virtual power plant, company says


Robert Walton@TeamWetDog


June 25, 2019


Dive Brief:

  • AutoGrid will partner with Japanese energy services and trading company ENERES Co. to create what the company says could be the largest virtual power plant (VPP) in the world by number of connected assets.
  • Using AutoGrid’s control and customer engagement software to aggregate and dispatch energy from demand response and distributed energy resources, the project expects to add more than 10,000 assets to the VPP between 2020 and 2021, “with rapid scaling in subsequent years.”
  • The VPP will initially focus on aggregating energy storage, but ultimately will include a broad range of behind-the-meter resources. Recent Enbala research shows utilities are working to aggregate control of more resources, developing more complex Distributed Energy Resource Management Systems (DERMS).

Dive Insight:

The AutoGrid-ENERES VPP will launch with only batteries aggregated into the system, but will later include an array of resources, including distributed solar, combined heat and power, smart thermostats and electric vehicles.

The plan is for ENERES to offer the combined DERs into a dispatchable virtual resource to participate in Japanese wholesale energy and capacity markets.

Driven by declining solar and storage costs, distributed resources and demand response are key to daily operations, ENERES President Masahiro Kobayashi said in a statement. 

That’s mirrored in Enbala’s survey of more than 100 utility participants at the DistribuTECH conference in New Orleans this year and a report it commissioned from Navigant, which concluded approximately 25% of respondents have a VPP or DERMS in place to control and manage distributed resources.

Today, they’re mostly used for automated demand response and to integrate efficiency, but battery storage, customer generation and EVs are all becoming more common.

 Credit: Source: Enbala 

As electric vehicle adoption grows, Navigant says utilities will have options for how they are leveraged.

They are “ideally suited for frequency regulation, a major VPP use case,” according to the report. But they can also provide reactive power and voltage balancing, “services that are more aligned with DERMS deployments by utilities.”

EVs’ ability to act as last resort stationary storage services and possible demand response resources give them additional value, the firm noted.

But EVs are also “a conundrum for utilities,” according to Navigant Associate Director Peter Asmus. “If not managed intelligently, [plug-in] EVs can pose a threat to overall grid reliability.”

The firm’s research shows that the market for plug-in EVs grew by approximately 70% between 2017 and 2018.

They “represent mobile loads equivalent to an entire home,” Asmus wrote. “The size of these loads, and their capacity to suddenly appear and disappear, is a phenomenon giving grid operators heartburn.”